Fact check: Does Tasmania have the weakest political donation laws in the nation?

The claim

The issue of political donations remains a source of ongoing policy debate in Australian politics, amid concerns that powerful interests — including property developers, tobacco, liquor and gambling businesses — are buying influence.

In Tasmania, ahead of the March 3 state election, the Liberal government is facing pressure to introduce tough new political donation laws, going beyond the existing federal laws requiring the disclosure of individual donations worth more than $13,500.

The leader of the Tasmanian Greens, Cassy O'Connor, said in a press release that donations from vested interests such as the now-defunct forestry business Gunns and hospitality and gaming company Federal Group had a "corrupting influence" on democracy and good governance.

"Tasmania has the weakest political donation laws in the country," Ms O'Connor said.

Is this correct? RMIT ABC Fact Check takes a look.

The verdict

Ms O'Connor's claim is a fair call.

Currently, Tasmania's political donation laws are almost identical to those of Victoria.

Both states defer to the Commonwealth Electoral Act 1918 in terms of regulating political donations, although Victoria goes slightly further, imposing an annual cap of $50,000 on the amount that gambling and casino licence holders are allowed to hand over under the state's Electoral Act, 2002.

This amounts to a subtle distinction between the two states.

However, once Victoria's promised new rules are legislated, Tasmania unambiguously will have the weakest political donation laws among the states and territories; equally as weak as the federal laws to which it defers.

Those federal rules are being modified, with the Turnbull government announcing in December 2017 that it was banning donations from foreign bank accounts.

The existing laws in Tasmania

There are currently no state-based restrictions on political donations in Tasmania.

Instead, political parties in the state are bound by the Commonwealth Electoral Act 1918 (as are all parties across Australia regardless of state provisions), which has long been criticised as deficient, outdated and opaque.

Under the Act, businesses, lobby groups and individuals are free to donate whatever they choose, although any donation worth more than the indexed threshold (currently $13,500) must be declared annually.

The laws are sufficiently lax that donors can escape public scrutiny when making multiple donations, provided they do not breach the threshold on individual days.

For example, a business would not be required to declare several daily donations equal to but not exceeding the $13,500 threshold.

In addition, the disclosure by the Australian Electoral Commission of political donations for a given financial year does not occur until the following February.

That means, in some cases, a donation may not be made public for up to 19 months.

The absence of any state-based laws in Tasmania is similar to the existing (but soon-to-be overhauled) regime in Victoria where the only constraint on political donations is imposed on gambling and casino licence holders, which cannot hand over more than $50,000 in a year (although there is no limit on donations from entities associated with casinos and gambling businesses).

It is worth noting that Tasmania's upper house, the Legislative Council, does impose limits on campaign expenditure by political candidates, although this does not affect the amount that can be donated.

In addition, the election of candidates for the Council, which occurs on a rolling basis in May each year, does not coincide with general elections for the Legislative Assembly.

Assessing the claim

In November 2017, Fact Check tested a claim by Victorian Premier Daniel Andrews that Victoria was set to get the "strictest donation laws in the country" under a shakeup to be introduced ahead of the November 2018 state election.

Fact Check concluded that the claim was a "fair call", assuming Victoria's new rules are passed by the State Parliament as proposed.

To test that proposition, Fact Check identified six criteria to compare the relative strictness of donation laws across nine jurisdictions — the Commonwealth and the six states, the Australian Capital Territory and the Northern Territory.

Those criteria focused on:

The existence or otherwise of caps or limits on the amounts that can be donated

The threshold at which donations must be publicly disclosed

Whether there were bans on certain types of donations (for example, those from property developers)

Reporting requirements (for example, annual, twice-yearly, real time)

Whether third-party campaigners were covered

The penalties for breaches

What is being proposed in Tasmania?

Under a Tasmanian Greens' proposal, donations from corporations and "vested interests" would be banned.

According to Ms O'Connor's press release, issued in January 2018, this would include property developers, tobacco, liquor and gaming industries, and foreign companies.

In addition, the Greens want mandatory real-time disclosure laws for all donations of more than $1,000.

The Labor Opposition is also promising reform, including a disclosure threshold of between $1,000 and $2,000, the disclosure of donations within 14 days, and a ban on donations from tobacco companies and on foreign donations to individuals, political parties or third parties.

Labor is also proposing a campaign expenditure cap of $750,000 for political parties and $75,000 for lower house candidates.

How does Tasmania compare with other jurisdictions?

The following table summarises the regulation of political donations across the nine jurisdictions.

In Tasmania, there is no cap on the amount that can be donated and, in accordance with federal rules, only single donations worth more than $13,500 must be disclosed.

In addition, there are no bans in place on specific types of donations.

The reporting regime is also relatively weak, with donations made in the previous financial year disclosed annually and up to 19 months after being made.

Also, unlike in some other states, third party campaigners such as activist organisations or lobby groups are not covered by the rules.

Nor are there any state-based penalties for breaches (although the $21,000 penalty under Commonwealth rules could be applied in the event of a breach in Tasmania).

As can be seen in the table, other states have stricter rules. In NSW, for example, all donations of $1000 and above must be declared, with an annual cap of $6,100 for political parties and $2,700 for individuals.

NSW also bans donations from property developers, tobacco, liquor and gambling businesses and from foreign entities. Its donation rules also apply to third-party campaigners.

In Queensland, all political donations of $1,000 and above to parties and third-party campaigners must be declared in "real time"; foreign donations are also banned.

Under Victoria's proposed overhaul, donations to political parties, associated entities and third-party campaigners would be capped at $4,000 per four-year term (an average of $1,000 per year), limiting the scope for fringe groups to use donations as a means of exerting influence over political parties.

These groups, however, would still be able to raise funds to run their own political campaigns.

As Fact Check noted in its recent assessment of the Victorian proposals, the devil will most definitely lie in the detail of the legislation.

Northern Territory

Disclosure threshold of $1,500 or more for political parties, associated entities, or $200 for candidates

Penalties of up to $30,800 or one year imprisonment for breaches

What the experts say

Graeme Orr, a Professor of Law at the University of Queensland, and an expert on electoral law, said the claim was fair, given Tasmania was dependent on federal laws.

"So, it relies purely on the annual Commonwealth disclosure 'dump', revealing some donations over $12,300 per annum to Tasmanian branches of federally registered parties, but up to 18 months after the event," he said.

Professor Orr added that for a small state such as Tasmania, "context is key".

He said $12,000 would buy more access or influence in Tasmania's small electoral and campaign markets than in larger jurisdictions.

"It is odd," he continued. "In other respects, Tasmania has led Australia. It persevered with expenditure limits for upper house campaigns, an idea now picked up in NSW and SA elections generally.

"It also helped invent a key form of proportional representation and even uses it to elect governments in the lower house, a voting system adopted in the ACT and Senate systems."

Professor Richard Eccleston, the Director of the Institute for the Study of Social Change at the University of Tasmania, said that similar to the soon-to-be replaced Victorian regime, Tasmania's House of Assembly elections were not subject to state-specific donation disclosure laws, leaving it reliant on federal laws, which apply to federally registered parties.

Professor Eccleston pointed out that tighter caps applied for Legislative Council elections, although these did not coincide with general (Legislative Assembly) elections.

He said that once Victoria's reforms were implemented, Tasmania would clearly have the weakest donation laws in Australia.

"The fact that we won't know who has funded the campaigns of parties contesting the Tasmanian election until 2019, if at all (depending on whether donations were above the $13,500 federal threshold), is bad for democracy and completely untenable," Professor Eccleston said.

Professor Colleen Lewis, co-director of the Parliamentary Studies Unit at Monash University, said Tasmania's political donations regime was arguably the weakest in Australia.

"It does not have state-based laws that govern common elements of a political donations regime. However, it does have laws governing campaign expenditure limits that include the requirement to furnish election expenditure returns, and penalties for submitting a false or misleading return."

Governance expert Dr Lindy Edwards, of the School of Humanities and Social Sciences at the University of NSW, said while all other jurisdictions had tightened their previously extremely lax laws, Tasmania had not.

"The federal laws are extremely weak, with the major parties only declaring about 15 per cent of their income as transparent donations, on average," Dr Edwards said.

"The federal laws are also pretty much a free for all, in terms of who can give and how much."

Dr Edwards said other states and territories had, to varying degrees, added more rules in a bid to clean up their systems.

"Tasmania is the laggard," she said.

However, Dr Edwards said it was not strictly true to say Tasmania was the worst, "because they are as bad as the feds".